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tv   Bloomberg Markets Middle East  Bloomberg  July 25, 2016 12:00am-1:01am EDT

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♪ turkey promises in infrastructure funding to keep growth on track, we speak exclusively with the prime minister. stocks leading losses. japanese exports fall for the ninth month fueling hopes of fresh stimulus this week from the boj.
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on,rter: and pokemon go nintendo plunges the most since 1989 after warning that the game will not have a big financial impact. yousef: it is 8:00 in the emirates, 5:00 in london. just passing a day in hong kong, welcome to bloomberg markets middle east. yousef: the longest losing streak in two months for the gcc market index. averagehowing awaited uninsured for you -- the volumes dropping, the summerlong thing in impact. arabia, of saudi looking at 23% below the six-month average.
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the yellow line, that is the saudi index which has underperformed the average in this part of the world. your purple line is showing the dubai benchmark which has outperformed. if you put your money in the dubai index, you would be in the money. loyal way into this picture. oil was down 4% last week and told that this could change with one of the biggest companies in this part of the world expected to release second-quarter earnings, making up 8.2% of saudi index. it is a: angie: contrast to what is happening today in the asia-pacific as we generally see asian stocks rise. let's check the markets right now. mumbai has been trading for 20 minutes.
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1/5 of 1% down. the hang seng is also down. weakerning gains as the yen sending shares in tokyo higher. -- it is just under two hours away from the opening of the emirates market. a quick check of the markets closed. saudi stocks leading equities lower as the trading volumes perhaps because it is the midst of summer. still, volumes are unsurprisingly poor. checkout turkey appeared we are seeing some gains after the equity markets have been boosted after the surprise military coup. on the first check
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world headlines from around the world with husband. verizon center by yahoo! assets for $4.8 billion, the announcement coming before monday trading begins in new york. the deal will include their real estate assets with some intellectual property sold separately. they will continue to hold stakes in yahoo japan and alibaba. smartphone demand may be waning. revenue growing 40% to $37 billion that operating profits narrowed to 12%. the company used selling network to expand beating apple and samsung in china. the democratic party chair is stepping down over claims of political bias threatening party unity as the convention opens in philadelphia. debbie wasserman schultz will
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quit after the convention following the release of e-mail suggesting staff worked to undermine bernie sanders during the primaries. both clinton and obama issued statements calling her a friend. as one to omber music festival in germany. the attacker was a syrian refugee who had been denied a son of the was allowed to remain in the country. the explosion follows another attack on friday night in which an 18-year-old iranian german gunmen killed nine people and then himself. powered by more than 2400 journalists in more than 120 countries, this is bloomberg. yousef: bernanke are your dream has wrote out the early election saying the government plan of infrastructure funding keep growth on track.
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the government is trying to limit the economic fallout from the thing military coup. he told bloomberg the purchase those involved is nearing an end. this has come and gone and the national will and the will of the people has destroyed the plotters. life is back to normal in turkey and you can continue long-term investments. the turquoiseout carboniferous investors. we have all kinds of tax incentives and we are given priority to value added investments. yousef: our managing editor for the middle east conducted that interview and he joins us now from this temple. vera still close to record lows, 3.06.
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as the prime minister been optimistic in his assessment? be fair, he also said that what has happened, the military coup will have an impact on the economy. what he is saying is that the turkish government is in charge. they are going to take measures, trying to put a fund together. this is the they have talked about before. they are saying they are going to keep investing in megaprojects such as the dredge in his temple. -- istanbul. when agencies like the fmp downgrade turkey they are jumping the gun interview should give the chance to prove that they are back in business. angie: talk to us about the funding.
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was there any detail on the amount and how it is actually going to be run? guest: very little detail. dated say they are going to do a fund like that a while back and there was talk of taking the money from the unemployment fund that they have here but very little detail that it will be in a tens of millions of dollars in it will be invested in your projects, aiming to relieve pressure on the budget although turkey does have some room in the budget site -- they have a deficit of only 1.5% and in debt to gdp ratio of over 30%. are seekingstors clarity on a few fronts, where does the road, from here you guest: i think this is what the interview was about. they wanted to talk to investors
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. they are telling everyone had it comes to economic policy, things will be back to normal. he separated out the state of emergency from the economic policies and said that will continue as normal. any reforms will go through parliament as normal. he was mainly aimed at persian -- purging those from state institutions. beyond that turkey is open for business. yousef: that was our managing editor for the middle east. we'll hear a lot more from binali yildirim later in the program. the biggest event is probably the boj policy decision, the latest it under scoring challenges. we have david ingles here to talk about it.
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there is a lot of money on the table. david: looking at these expectations pointing to the fact that they have to act, the element of surprise is obviously gone. when you look at the trade numbers, they might not be japan's fault. when you look at exports and trading partners, china is slowing down. exports also down. these numbers have actually been falling in double digits for months. look at the broader picture across asia, it speaks to that point where it is not just a japan problem. there is the element of the currency involved. but also, when you have a lot of these countries in the emerging markets that are not getting
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close to potential, this is what a drop in exports or the drop in global trade activity is so much that places like the baltic dry index still important is nowhere near levels to what we expect. it was better than estimates but the trend, the shift is still sinking. angie: is this relevant for the boj? is probably won't change the fact that they need to lacked as early as last week we were talking about the need for them to act. when people start talking about two they need to move the goalposts from inflation? , youyou have cheap oil have a stronger currency and you have been importing cheap oil, that impact gets exacerbated. we're down 18 months. when you put those together, the
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boj has to come out and say why they need to move the goalposts. one of which is almost long-term permanent transitory effect coming from cheap oil. as far as what they are expected to, 32 out of 41 expect them to do something. the meeting will elaborate on friday. if the yen move doesn't happen -- if it does happen, what kind of things can we expect to see in terms of david: thereie: are a few things they can do. they can expand a more material base. they can take rates down further. most three seem to be the popular options based on our survey, increasing purchases, cutting rates. and of course, increasing pay.
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thank you for that. yousef: this get the latest from the markets. we are pretty flat on the regional index. it was a better start to the idea of trading. we have seen some weakness coming through some of the asian markets particularly in hong kong. they are off by one third of 1%. we're seeing some weakness in the korean yuan which is putting downward pressure. the shanghai market higher by around one quarter of 1%. a flat start coming through from india. we have seen the nikkei 25, officer of your eyes. the yen is continuing to weekend. nintendo been there
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effect has went on the broader topic index with nintendo veggie quite significantly. the asx 200 still holding on to another months high and is and is one of the best performers in the region today by almost 1%. it is actually at an all-time high. i want to show you that weakness we have been seeing in nintendo. this after the company itself separate the effects of pokemon go on earnings is likely to be limited and we are seeing nintendo falls significantly coming out weaker by over 70%. weaker today,o down by 11%. there is a report that we will see a tiny up between verizon and yahoo!. yahoo japan to settle that weaker. that weakness coming through from hong kong, taking some
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shine of the overall regional index. more onnow, you can get this interested in news in our digital destination tailor-made for the middle east, you will find reports in market leader from the region plus you can watch all of them reports, interviews and special content only available online. angie: later in the show, , mike rossthe brexit to chengdu for the latest. plus the outlet for a post-coup turkey. the ceo of do a group joins us next. this is prepared ♪
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the company plans to
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boost staff by about 5060 people this 50 year and that will include hires for the underwriting busyness. a japanese company wanted bigger slice in managing deals in the last fiscal year. iron sure has filed for an ipu in the u.s. after concerns were raised about their parent firm. the insurer has been for that initial offering of 100 million dollars, or proceeds going to the chinese conglomerate who bought it last year. outlooke had a negative last month. latest installment of star trek topped the box office in north america.
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knocked theyond secret life of pets off the number one spot. though wind is good news for viacom is a tries to sell its stake in paramount. stocks saudi arabia retreat in across the gulf -- tradingat them volumes plunging. gabay. us now is henry i want to get your take on what is unfolding in turkey. we have put out a chart for our reviewers. convention is the selling signals on a moving average divergence divergence basis. you can see the number of constituents in terms of those showing signals. us have increased. the bears are returning to the market. you do not like the turkish that isment guest:
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right. i think it is technical rebound. this is that balance i don't think it is -- a very good indication of where investors seek to go. i think this is more of a short-term rebound that will not take on overtime. i think the recent events are will leave deep scars and the turkish institution, turkish society and investors understand that. i would not go to turkey now. event, brexit here, and what we are seeing in the asia-pacific region and globally on the start, we are seeing recovery. in januaryo-year low and if you take a look at the chart right now, and i think yousef has got it on his and therefore us there on his
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terminal -- you can see a recovery of global stocks, at and, in thenow, east, in the asia-pacific -- but what about their? guest: i am not sure i got the question. just wanted to see if you are seeing an impact of the brexit on the gcc, especially a long-term one, because in the asia-pacific, we are not seeing an effect at all. guest: i think the impact on the gcc countries will be limited. integration between the british economy and the gcc is fairly limited. the financial impact will be almost unnoticeable. i would not worry much about
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what brexit will entail in terms of potential impact on the gcc countries. economies are more integrated with u.k., such as south africa. we will discuss the middle east and north african markets and get his thoughts on saudi arabia when pressure continues to build off the oil crisis that we are seeing at the moment -- stay tuned.
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yousef: welcome back. ceo of duet group is with us. saudi arabia.
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we have put of an overview of what happened. the best-performing stocks on onr and and are function, your bloomberg -- just again, to get that perspective -- a lot of it, recovery place and some of the food and beverages [indiscernible] what are your calls on this? hedy you dissect the market? guest: things are very interesting what is going on in saudi because you are seeing several ongoing trends. you have loss of coordination to oil prices and the recovery. that is why you are seeing petrochemical companies doing well. obviously we need to have a view on oil prices to make that call. what is more interesting is to look at the internal demand, i think there is definitely short-term weakness.
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sales are down to low double-digit. even for theted seasonality. what you need to keep in mind is there is weakness in from a consumer perspective, it is expected because of overspending. >> you expect the weakness to continue. beyond theuing, move oil player. the national transformation plan is a tries to move away from this dependency on oil, how would you approach that strategy? you need to look at what the ntp says. center would be fast privatization in several sectors.
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a lot of regulatory changes, as well. that is how you can look for potential winners from the plan and stay away from businesses who are traditionally relying have the on all of the subsidies because these are going away for a long time. >> the on saudi arabia, what are you looking at? interestingmains because it is an economy that has diversified quite well, specifically to buy. dubai is up 11% since the beginning of the year. i would keep watching egypt for an imf program. coming up, what are finance
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chased doing to get things going yet we will dive into the g-20 meeting life chengdu
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30 minutes before afternoon trading kicks off in hong kong. ♪ top stories, turkish prime minister binali yildirim has ruled out early election saying the government is planning and infrastructure fund to keep growth on track, the government is trying to limit the fallout from the failed coup, telling
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bloomberg that those accused of involvement are nearing an end. yousef: the g-20 finance ministers have expressed concern over anti-globalization sentiment in pledge to double down on defending the group's principles. the meeting in china one month after the brazen the comedy renewed promises to promote inclusiveness. fell forpanese exports the ninth straight month adding to concerns to revive the economy. imports also felt leaving a trade surplus. the yen surge has made exports more expensive. toyota warning that earnings will be affected. 12:30 in hong kong. yousef: 8:30 in dubai. anna: 5:30 here in london. county down to the start of the european trading day.
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talking about the news flow over the weekend iran brexit. over in china talking about how some of the uk's economy will get. exploring trade deals and talking about her recent and fiscal policy. theresa may is go to northern ireland. talking about the status of the border running between northern ireland and the republic of ireland, the only land border between the u.k. and another eu country, therefore taking on status. no border patrols have been prominently in place. 30,000 people across every day. a lot of focus on what happens to that border in the aftermath of the brexit. the observer talked about how the eu is talking about giving them a seven-year exemption.
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they are not giving much detail about the high-ranking u.k. officials but it is an interesting prospect. earnings and focus once again, one of the highlights he was looking for? anna: earnings out of the gate, 6:00 u.k. time, we will be speaking to a representative from phillips, they sold their lighting business, still trying to sell parts of it will be interesting to explore what progress they have made on that. this is the company that makes our honors in scanners. that could be interesting. we will also stay to boris kolodny. largest wealthrd manager in switzerland.
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they've been hiring, reorganizing their business. ryanair also reporting numbers at the start of our program. after what we have heard, gloomy statements from easyjet and lift anza paid -- lufthansa. thosese reality of terrorism events occurring having a negative impact on the aviation sector. we will talk to a representative ryanair,.k. time from about how that business is coping with the brexit conversation. all of that to come on countdown. g-20 finance ministers have reiterated a pledge to use policy tools with confidence following a summit in the chinese city of chengdu.
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our chinese correspondent is there. what were the concerns there? front and center was the global growth pitch, a major concern of policymakers. just how to tackle it, more fiscal support, particularly in light of the brexit in which the future means is those negotiations start and also, concerns now around rising anti-globalization sentiment, policy makers seeing that in brexit vote and donald trump. i put some of these questions to came,esident jim young asking him about his aspect -- give good wanted to
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information to people for a long time but unfortunately we keep having to downgrade. is understandable in this context. we thought that the u.s. was solid. the eurozone seemed to be getting better. a course, that brings it was hit and we trying to understand what the implications are. in the global growth will be disappointing again. >> there is also a consensus formed after the last days of discussions around the overall love central banks in the fact that they cannot continue to be relied on to do the heavy lifting heads the focus on fiscal report and structural reform. him, are central banks running out of firepower? how far can you go with negative interest rates?
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$12 trillion of bonds reality negative instruments. who would have thought that would be possible? say, they, i would are going to run out of instruments. the nations that have fiscal space are going to move toward fiscal stimulus. >> any details on when britain might start negotiations over departure? >> the u.k. chancellor was here and he was in much demand particularly amongst his counsel appears. he did not give us a date but we spoke to the european convention or of mixed affairs. he told us he thinks that september is when they are going to announce the dates for
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triggering parcel 50. it is up to them to evaluate that. it is something that we have to manage for ourselves. we need to prepare negotiations for the eu. one factor is predictability. whatever this time is, at one -- i don'tst know know, december or january. we also spoke to the french finance minister who said that he wanted to see the article 50 triggered at the end of the year at the very latest at the beginning of next year so timing is crucial that britain cannot wait to long. the european saying they have
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already started discussions about those negotiations. they can start to talk about how they start those negotiations, the -- so that is some small measure of progress. the other measures of conversation with their turkish taxtary coup and closing loopholes and the question of italian things concerned that they may to face bailout and a width of the income of with the european commissioner to push through. thank you for that. theef: let's get more from -- lots to get through. let's kick off with expectations in terms of what the boj is going to do. i am looking at a bloomberg survey. analysts expect kuroda in the boj board to expand their
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record program at the meeting. is this the right time to do that? it is very interesting at this stage because inflation expectations are falling. the bank of japan will revise their inflation forecast lower. in mid-july, we had a convincing one for shinzo abe in the elections and that does raise the possibility that you can see a more forceful policy response if the boj waited and we saw coordinated policy response. this historical proactive in this and the fact that inflation forecasts is likely to be revised lower than it is a real possibility and the forecast numbers that consensus expectations show that that the
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bank of japan will ease the meeting on the 29th. >> we keep hearing about helicopter money. denialseen vociferous from the boj governor. monty make of the concept from aically? theoretical perspective i think it is extremely sound and strong. we have to remember that japan is at its limits of conventional unconventional monetary and fiscal policy. when a government spends more, it issues bonds. quantitative easing is way central bank will typically by those bonds. monetary finance deficit spending is when the central bank directly finances givenment spending and
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the government debt is at 250% of gdp, as a concept, -- was in japan and he has long been a proponent of monetary deficit finance spending, i think it is clearly an option on the table. soonuestion is, is it too since shinzo abe is convincing victories for a robust coordinated and likely to the successful coordinated and fiscal monetary policy action to be drafted and i think that is the risk. it is perhaps too soon. you say it is too soon and the question for central banks ,n the u.s., the fed is, well is it too late? at some point they have caught to raise rates. there is a growing sentiment that it is probably maybe at
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least september because of the >> it iselection? interesting and it highlights a number of political overlays. the -- immediately after that brings it, the market was until 2018fed action . now we have a 50% probability that the fed will do something by december 2016. timing,e election september is uncertain. seefed would be needing to fairly strong unilateral positive outcomes in both wagers and inflation for a september move. closer to december is more likely to be the outcome, particularly given this
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lingering backdrop of global recovery continuing around the 3% level of growth and not getting any traction. >> and no doubt that is going to persist for months, maybe into next year. thank you so much for that. let's get the latest the markets. we are theette: regional index pretty flat off the eyes it had been up as much thatlf of 1% on back of record highway saw once again on wall street on friday but there has been some selling coming through in hong kong. the hang seng is down one third of 1%. originalwaiting to the indices coming through to the energy sector on weaker commodity prices.
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in japan the nikkei to do five stillghs as well then stronger with the weaker yen helping things along on the broader topix. australia having a great day. zealand actually at a record high. a little bit of mixed movement coming through from southeast asia. still to come, turkey's message for investors that life is back to normal after the coup . we will have our exclusive interview with prime minister binali yildirim with what is next for the nation, with the turkish lira still trading next to record lows. ♪
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♪ angie: welcome back. a quick check of the latest business headlines. willie and him may be facing a takeover. the israeli founded holdings say they are considering a joint offer. they have until august 21 to formally announce the bid. this sunday times says the offer could be worth $4 billion. william hill has been struggling to boost growth. benjamin harrison yahoo! -- benjamin harrison yahoo! says clancy are trying -- prime minister netanyahu told a
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cabinet meeting that he wants to change that concentrated market. the government has proposed easing regulations, paving the way for new television channels. says theinali yildirim government is planning a multibillion-dollar infrastructure fund to keep growth on track. he told bloomberg there would be no early elections as the government tries to limit the economic fallout from the field. binali yildirim insisted that life was getting back to normal in turkey global investors should not be concerned. angie: binali yildirim revealed those plans to bloomberg. the prime minister addressed the economic repercussions of the coup and the move to cut credit ratings. attempt had an economic impact on the turkish economy. s&p immediately cut operating
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and i think that was not an ethical move. he was taken advantage of the situation. we have overcome a coup attempt, we have struggled to keep democracy running and these agencies should not be rushing decisions. this was saddening for us. economy does not deserve this if you look at the indicators. it is an ideological and .olitical decision we have no doubt about that. what we are seeing is this has come and gone and the national will and the will of the citizens has destroyed the plotters. turkey back to normal in and you can continue your long-term investments. .e will obstacles we are laying out the turquoise carpet in front of investors. we have all kinds of tax and investment incentives and we are giving priority to investments. reporter: is it of concern that
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this might lessen and put pressure on the turkish economy on the weaker spots? deficit remains the third-largest in the g-20 nations. >> we will continue with our investments without putting our foot on the brake just before the religious holiday we opened the bridge -- we will have the third bridge inaugurated over the bosporus strait and we will have the first terminal of the largest airport in europe which of the inaugurated in december and we will have the eurasian tunnel under the bulls first-rate which would be a note of it appeared in 2016 we will be the cornerstones of the talk of, the longest bridge in the world without slowing down -- turkey will continue its investments. reporter: you mentioned the government [inaudible]
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rather than investing on social spending but rather on itestment -- that would mean would reinforce sina weibo gross -- it would reinforce in a way that gross. grossnforce a no way the -- reinforce in a way the gross. >> directing funding to the turkish economy? >> we are establishing a structure that will finance large-scale projects. we are going to finance investments through this instead of the general budget which will be cleared of problems. reporter: when you became prime minister you said that changing turkey into a democracy was your priority. has anything changed in that after last week? for example, especially regarding the timeline of that
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change -- are you still considering a referendum should parliament not pass it as you desire? is there a possibility of early elections? >> early elections is out of the question. i am underlying this and being very clear that it. there are some circles that are trying to confuse the situation saying the x party has come out stronger after the coup and will have an ambush election. this is not even going through our minds and we do not find it ethical to we have power for four years and we will use that power for the next four years. if there is anyone who is trying to seize that authority we will fall on their heads like a sledgehammer and we did. from now on, if anyone is thinking about doing such a thing they should watch their steps. a presidential system is
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necessary? which is necessary for stability and security. under the presidential system there would be no one attempting such an adventure because then it up to the political will would be in charge, a week government would encourage coup plotters. has been several such attempts during the reign -- we have only succeeded in thwarting them. how we succeeded because the nation was backing us. as gamersming up continue their hunt for pokemon nintendo investors need a search harder for value. ♪
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♪ welcome back. one of the big topics in asia, nintendoon go affect,
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shares plunging. you have been watching this, angie? angie: it is 80% down. -- 18% down. when pokemon go launched nintendo has almost doubled its share price to evaluation of $17.6 billion but it has given today.out $6.4 billion stocks sinking back down to earth and by now it is close to that limit, 18%. nintendo actually before it reports earnings on wednesday said today that all of this so,ctations for profit -- for all of those investors expecting an upside, do not expect it. you can get additional
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perspective on bloomberg with the bloomberg gadfly columnist who says that their profit is a craze. a fascinating story, angie. ?c+sv
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anna: keeping turkey on track. the prime minister tells bloomberg in an excuse i interview a multibillion dollar fund is being planned to keep the country's growth intact. anti-globalization sentiment grows. they signal anxiety in the age of brexit and trust. verizon offers $4. billion for the firm's core assets and the official start of european bank earnings season kicks off this morning. we speak to the c.e.o. of britain's third


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